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Sealing the future for Garlock’s success

Friends have jokingly called him the VP of broken businesses.
“I had a reputation of being a fixer,” says Paul Baldetti, who has spent more than a decade helping struggling businesses succeed.
His current position, president of Garlock Sealing Technologies LLC, also has had its share of challenges.
The 47-year-old was hired in September 2003 and is leading the company through a transition time. Before that, he served as president of ITT Industries Inc.’s Industrial Pump Group in Seneca Falls.
Founded in 1887, Garlock manufactures seals, gaskets and hydraulic components for industrial applications. The company has annual sales near $250 million and some 1,500 employees at 10 facilities worldwide. It ranks as one of Wayne County’s largest employers with roughly 550 workers.
Garlock did not disclose its local sales. Its growth plans include improvements to its oil seal and gasket lines, but there are no immediate plans to add workers locally.
Last year, Charlotte, N.C.-based Enpro Industries Inc.-Garlock’s parent company-announced it would spend up to $35 million to modernize Garlock’s Palmyra headquarters.
EnPro was spun off by owner BFGoodrich Co. in June 2002. The new company included Goodrich’s former engineered industrial products segment. Before the spinoff, Garlock was a subsidiary of Coltec Industries Inc., also owned by Goodrich.
The modernization project is expected to take five years. The company plans to replace the 26 buildings on campus, which total some 700,000 square feet, with seven new buildings totaling 350,000 square feet.
Garlock reps looked at out-of-state sites for a new facility, but state officials offered some $8 million in grants and tax credits to keep the company here.
Not one for small talk, Baldetti speaks directly when responding to questions. He will talk at length about certain topics, including Garlock, whose headquarters he describes as inefficient and unsuitable for growth.
“We had no delusions and knew this place had to change profoundly,” Baldetti says. “I believed what was here could be fixed, but also realized that it may not be possible.”

Career focus

Even as a youth, Baldetti knew he wanted to be a business leader. It was a mind-set partially created by his family, which always had run its own business.
Baldetti’s grandfather and uncle ran a successful Italian restaurant in St. Louis.
Propelled by the restaurant’s success, the family then started an Italian foods business, selling food and supplies to restaurants. That was where Baldetti worked as a youth.
“We had had a family business as long as I can remember,” he says, noting that family members were always making executive decisions as they talked about things like buying machines or expanding product lines.
His desire for leadership became evident as he worked at other lower-level jobs in his youth, including a technology center at General Motors Corp.
“I was just a cog in a wheel,” Baldetti says. “I could do it, but I wasn’t happy.”
A good student, engineering was a practical choice for him to pursue, but he admits his friends played a role in his decision.
“My key strategic decision was to go to engineering school with friends,” he says.
William Rutledge, former CEO of St. Louis-based Emerson Electric Co. where Baldetti would later work, encouraged him to pursue a career in engineering.
After high school, Baldetti chose to attend a smaller school. He received his bachelor of science degree in electrical engineering from the University of Missouri-Rolla in 1981.
After getting his undergraduate degree, however, he decided to hit the Ivy League and received his MBA from the Harvard University Graduate School of Business Administration in 1983.
With his degrees completed, Baldetti went to work for Emerson Electric.
He stayed with Emerson Electric for five years, learning different aspects of the business, from operations to marketing. Baldetti calls working for the business, which provided lots of hands-on training, a great opportunity.
After leaving Emerson Electric, Baldetti joined a leverage buyout group that acquired three small struggling firms. He was named president and general manager. He was 28.
“It wasn’t a plum assignment, but it was a tremendous training experience,” he says.
As the head of the company, Burks Pumps Inc., Baldetti was responsible for everything from overseeing operations to handling finances.
“With the bigger company (Emerson Electric), I thought I learned a lot, but I never had to think about making payroll,” he says.
The goal was to take the three companies-which totaled some $15 million in annual sales-and turn them into a $100 million operation, take it public and then acquire other companies.
The business had reached $72 million in annual sales when it was sold in the mid-1990s to Crane Co., at that time a $115 million company.
Baldetti remained at Crane and was given the job of running the firm’s struggling valve business, Crane Pumps & Systems Inc.
While he was based on the West Coast, the job took Baldetti around the world and gave him firsthand knowledge of international business dealings, from corruption issues during the Asian financial crisis to removing a manager and his family from Indonesia during a time of turmoil.

Coming to the Rochester region

He was traveling some 75 percent of the time and ready to be less mobile when ITT called in 2000 and asked him to run its pumps division. The White Plains-based company just had acquired Goulds Pumps and Baldetti would be based in Seneca Falls.
He knew Goulds’ reputation from working in the industry and was quick to take the job. In hindsight, he may have jumped too quickly, Baldetti says.
“ITT was a different (business) culture than I was used to,” says Baldetti, who previously worked in more traditional manufacturing organizations. “I loved (my division), but it just wasn’t a good fit for me overall.”
In 2003, he interviewed with Ernest Schaub, Enpro president and CEO, and was impressed.
“I immediately went out and bought stock in the company,” he says.
Baldetti was hired at Garlock at a time when Enpro executives were installing several new managers at the company and looking to make changes.
When he met the team at Enpro, Baldetti felt like he was back at home, he says.
“At the end of the day, the culture of a company is easy to take for granted if it works,” says Baldetti. “If it doesn’t work, I imagine it’s similar to being in a bad marriage.”
But when Baldetti drove through the gates at Garlock for the first time, the physical look of the facility was not what he expected.
“I was simply floored to see this old factory as the headquarters for Garlock,” says Baldetti, who says Schaub had the same initial reaction. “He knew we needed to revitalize this place. What to do with Palmyra was a huge issue for Enpro.”
It was also the most important issue for Baldetti his first year on the job.
“We had to decide how to fix Palmyra or how to exit Palmyra,” he says, speaking in his second-floor office in one of the buildings that will be demolished.
He began to figure out a game plan, which started with labor concessions. Baldetti did not mince words and told unionized employees what had to be done.
“People can only respond to what has been shared with them,” Baldetti says.
The project was able to come to fruition only because everyone-from employees to state officials-worked together to find a solution.
The first phase of construction on the remaking of the Palmyra operation is under way, as is an effort to add key products and make a significant investment in new machines and equipment.
There also is a focus on increasing business in developing economies. Currently, the bulk of Garlock’s business is in North America and Western Europe, but Baldetti sees both as slow-growth marketplaces.
The company is hiring salespeople in China and has a business partner in Japan.
Baldetti says it is inevitable the company eventually will build plants in the Far East to have world-class manufacturing facilities around the globe.
The Wayne County site will continue to manufacture two key product lines for the company-oil seals and gaskets-and provide local service.

A commuter

Baldetti now spends some 25 percent of his time traveling and mostly is focused on Garlock’s overall operations. When in Palmyra, his day is divided equally among phone calls, meetings and e-mails.
When not working, Baldetti spends time with his wife, Dana, and their children, Brynn, 16, and Jeff, 13. They live in Skaneateles, west of Syracuse, roughly 50 miles from Palmyra. Baldetti says the commute takes no longer than going to a business meeting from Wayne County to the far side of Rochester.
He is a member of the Fluid Sealing Association and has ties to his alma mater, serving on the University of Missouri-Rolla’s Dean’s Advisory Council.
Bradford Jones, general manager at ITT/Goulds Pumps Auburn operation, describes Baldetti as a visionary who thinks outside of the box.
“He truly understands the big picture,” Jones says, adding Baldetti is able to sit back, listen and make decisions to move forward. “He has this great ability to look into the future and see what a business has to do to be successful.”
He also spoke of Baldetti’s people skills.
“Employees really enjoyed working for him and with him,” Jones says.
Joe Boggan, vice president and general manager at Garlock, praises not just Baldetti’s business sense, but also his honesty and integrity.
“He does what he says and says what he does,” Boggan says.
As the driving force behind the changes at Garlock, Baldetti has been working with employees, politicians and Enpro executives, Boggan says.
“He truly cares about the future of Garlock, particularly in Palmyra, and the community,” Boggan says.
Boggan, who has been with the company two years and also worked with Baldetti at ITT, says Baldetti is a big reason Boggan chose to work at Garlock.
“He’s genuine and is exactly the person you talk to,” Boggan says. “It’s that type of leadership that helps give him credibility.”
Baldetti also is able to balance humor with seriousness. He jokes about how much of his free time is spent carpooling his teens to various events but also points out the importance of being with his family.
When responding to a question about the worst part of the job, Baldetti says matter-of-factly “interviews with reporters” but then says, on a serious note, the worst part is when a business plan does not work or employees lose their jobs.
Conversely, his professional high points are making high-level decisions that pay off.
He expects Garlock’s future to be bright.
“This really is a special business,” Baldetti says. “Here we are in this small town in New York and are known the world over for the products we make. People come to us with important and challenging applications.
“What we do matters.”
(adeckert@rbj.net / 585-546-8303)

04/28/06 (C) Rochester Business Journal

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